Seattle daily post-intelligencer. [volume] (Seattle, W.T. [Wash.]) 1881-1888, 1887-01-11
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emANTg ASSOCIATION 81

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cufy - recall mg ecgagsme1s 70 assend
the Aunual hauqret Of fhe Boston Mes
cantiis Association. the zssh inst. Inc
osafh il this city af Gen Loean. an IL
l1strious soldier and Distinguished
membsF q toe Sessts. imposes % ne,
~ PEsstdent u tie SeB4te, certain
dulfes IN respect % bis fznerai that /
cannot delegate 20 oshsFs. aud nv per-
sonai appreciation Of his great merits
and seFV1ess vii Eos allow me 20 abafs
IN the slighfesf degFse any mark Of ~
speei ano hon0r which, By tie custom
of the ssuate. IL awarded TO its mem
b~rs VITO die a. their posi- Of d0ty. No
doubt the gentlemen VINO invited me
viii heartily concur IN tbis decision.
fb0ueh 4 Will deprive me Of fitting
opportunity Of appealing 70 thea and
20 the husrness men Of the c01ntzy for
their aid IN ssttiinR upaD . non partisan
basis one Of the most important q1es-
tinns Of public policy nos pending. and
which Affects the trade. eomHercs and
1nanciai prosperity Of ali parts Of our
country alike.
When yoar invitation vas given. Il
vas iRtimated TO me that some remarks
on The national banking system Wonid
be acceptable. As e2nnot make them
10 person, avail nyself Of this oppos-
tunity D. = rite some sngRsstioss on this
subiscf that may aid some one else 10
presenting i to yoar association more
cieaFiy and fully.
And, firss Of ell. wish 10 state thai
the national banking system has real
izsd all she good that has ever been
oiaimsd for Il BY iis authors. Il has
furnished the best paper currency ever
isaa, by banking corporations. II was
adopted only after the fullest considefa-
tion. and won its way into public favor
only By slou process.
The hrst national bank bill had hard
passage through Congress. From De
cembeF, 1862. il remained during long
session Of Congress Enacted upon. In
the next session il was debated for near
" two weeks in the Senate. Il was
greatly aided by Charles sumner and
Henry Wilson. n was finally carried in
the senate BY tbs vote Of Senator An
thony, who, when appealed to BY Score
tayy Chase and myself to support it,
said be would vote for IL for the sake Of
bis country, bot II would ruin him in
Rhode Island. II vas carried through
the House only by the intelligent efforts
Of Boston merchant, Samuel Hooper.
II promptly received the signature Of
Abraham Lincoln.
Ibis banking system, like most others,
embraces two distinct departments, one
Of discounts, deposits and exchange;
the other the issue department. In the
| irat department. national bank has
bat little advantage over q State bank,
except Only IN toe credit which comes
70 national bank by the frequent ex
animation and publication of its con-
ditiOn. The popular idea Of a bank at
tHches mainly to lite issue department, OF
| the issue and circulation Of its notes %
money. IL Is ia respect 20 this function
that the provisions of the banking Law
mainly apply.
/ Nov the great advantages Of the ma
tional banking system over any otheI
can be stated ia general terms.
The franchises granted are free and
open to all who have the requisite CAPT
tai and comply with the Law. There Ii
ne elems nt OF monopoly about il, moi
any chance for preference or favoritism
The notes OF the bank are absolutely
secure beyond all peradventure. Ovel
| g., Loo, COO 900 OF national bank notes
have been issued since the system hA.
been IN force, and not one dollar bal
been lost By failure to pay it on demand
IL /. Of universal circulation, without
| question, throughout the United States
and since resumption in all coon mercia
countries in this world. In this respect
It is ~ least on parity with a Bank Of
| EoRisnd note.
Ii is guarded against oounterfeitinG
more carefully than sny ether circnia
ting note in existence. In addition Il
all the guards that protect the green
back, each bank Is protected by specia
dies and the signatures Of its officers.
The cost Of issuing and redeeminE
the national bank notes Is less than thai
Of any Of the European banks, and !.
only greater than taat OF the green.
backs because of the necessity of as
sorting the notes OF the several bank.
in the redemption Office.
The distribution Of these banks "a
eveRg town of Importance snd to almost
every county Of the United States hA.
practically abolished all rates Of do
nestle exchange. especially between
cites, however remote.
For these reasons, manifest 10 every
Intelligent man in our country, the
national banks would, by common con.
sent, be continued as q permanent sys
tem bot for the rapid payment of the
public debt. which, By the banking law
u made the sole allowable security fol-
all the bank notes issued. II Is this
difficulty which | suppose the meT-
chants Of Boston would like to have
stated ia the fewest possible words.
Would tt be safe or pradent TO accspl
any other form Of security than United
states bonds as the basis of nationA
bankinRl ! can only say | know OF
none. The attempt 10 define such 3
security obtainable in all parts OF thu
United States would open such dsnger,
as would destroy the system. Nor do
think IL necessary nov 70 definitely an
sweF question which need not arise fol
20 years.
There are still nearly one thous md
millions Of United Stetes bonds out
standing, not yet redeemable, Of Which
seven hundred and thirty seven millions
are not redeemable for 20 years. WHY
did not the national banks bay these
bonds when the Government VS. aux
iOus 70 sell them at Parf The only
answer that can be made is that they
held on TO bonds bearing a higher rate
Of interest. and thus overreached them
selves. l knew one bank president, a
personal friend OF mine, who would not
surrender his called bonds because be
thought he could after vhilr bay per
osnts At less than par. He lost At beth
ends Of the line. Il is this error of the
uAtioBsl banks that has involved them
in all the difficulties Of their position.
Bat whv do they nos buy the per
cents nov5 The answer is that, By the
advancing credit Of the United States
these bonds that could have been
bought In 1850 At par are now worth is.
aud woaid yield 81 present prices less
than "a Per cent interest. Ii 10 q Sc
rious question whether, under terms Of
existing Law. bank governed BY ITSELF
inter- - csB afford 10 pay such rates for
bonds foF The privilege OF issuing circu-
lAting notes 20 the amoaat of 80 per
cent. Of the par of the bonds.
Tots brings me 20 what appears 70 be
the clear. plain remedy for the rapid
contraction Of the cafrency nsR going